ESB Hotels Ltd, R v

In sentencing a corporate offender for serious fire-safety breaches, the court must assess culpability, the degree and scope of the risk, and the consequences of the breach. Deaths and a failure to heed a relevant warning are aggravating features. Comparisons with other sentences require caution, especially where the risk extends to many sleeping members of the public.

A fine must also reflect the company’s resources and its likely effect on the business. The court should consider pre-tax profits and not rely solely on gross turnover. Steps taken to remove a dangerous obstruction may reduce culpability, even where those steps are defeated by an employee’s criminal act, although they do not remove responsibility for the underlying unsafe system.

The appellant hotel company pleaded guilty at Bolton Magistrates’ Court to two offences contrary to section 4 of the Fire Precautions Act 1971. It was committed to Bolton Crown Court for sentence.

A hotel employee deliberately set fire to beds that had been left in a third-floor corridor, contrary to the fire certificate. Two guests died. A mattress stored elsewhere in the hotel supported the prosecution case that unsafe storage of combustible items was not isolated. The Crown Court imposed fines of £300,000 and £100,000, plus prosecution costs.

The company appealed on the ground that the fines were manifestly excessive. It relied on the employee’s criminal act, the disparity between the two fines, and the sentencing judge’s treatment of its financial resources.

1. The appeal was allowed in part. The court set aside the fines of £300,000 and £100,000 and substituted fines of £175,000 and £75,000 respectively. A defendant’s costs order was made.
2. The sentencing judge was entitled to find that the company had fallen well below the appropriate standard. Substantial combustible beds had been left in an escape corridor despite the obvious and foreseeable danger. The separate mattress offence showed that this was not isolated. A risk assessment two months earlier should also have alerted the company to the danger of storing beds and mattresses in accessible areas.
3. Applying F Howe and Sons Engineers [1999] 2 Cr App R(S) 37, the court treated the deaths as a serious aggravating factor and held that the unheeded risk-assessment warning was an aggravating feature. The danger was especially grave because the breach occurred in a hotel and exposed many guests, including elderly guests, to the risk of serious injury or death.
4. The deliberate act of the employee did not break the practical connection between the unsafe storage and the deaths. Had the beds not been left in the corridor, the employee would not have been sent to remove them. However, the night manager’s ad hoc instruction to remove the beds did reduce the company’s culpability, though less than an absence of causation would have done.
5. The judge gave inadequate weight to the company’s financial position. Under F Howe and Sons Engineers, the court had to consider the defendant’s resources and the effect of the fine on its business. It was important to consider estimated pre-tax profits, rather than gross turnover alone. That error, together with the attempted removal of the beds, made the total fine excessive.

• Court of Appeal (Criminal Division): Allowed the sentence appeal in part and substituted reduced fines: [2005] EWCA Crim 132.
• Crown Court at Bolton: On 19 July 2004, imposed fines of £300,000 and £100,000 after committal for sentence.
• Bolton Magistrates’ Court: On 27 May 2004, the company pleaded guilty to two offences contrary to section 4 of the Fire Precautions Act 1971 and was committed for sentence.